Everyone in Washington and the wonkosphere seemed to be waiting for the CBO’s preliminary analysis of the Senate Finance Committee version of ObamaCare — and were relieved (on the Left) or freaked out (on the Right) that it suggested it may reduce the deficit by $81 billion. However, no one ever convinced me that any of the amendments were going to significantly increase the costs of the original Baucus proposal. Had the final product generated red ink, the number would have been small enough to be fixed by Baucus with a minor tweak or two.
If people want to focus on the fact that the Finance Committee does not have legislative language for the CBO to score, I guess that’s okay. If Peter Suderman wants to remind us that the Medicare cuts designed to pay for much of the bill’s tab are not going to happen, I guess that’s okay, too — though he admits that criticism will have a hard time getting any political traction in the Senate.
It might be more useful to look at the fact that the CBO’s preliminary estimate, with its cost-bending deficit numbers, relies on $201 billion in revenues from an excise tax on high-premium insurance plans. However, today, more than 150 House Democrats sent a letter to Speaker Nancy Pelosi opposing a new tax on expensive insurance plans. While the letter is supposedly concerned with any such tax eventually hitting middle-income Americans, the reality is that these House Dems are acting at the behest of their Big labor masters, which means they are (ahem) unlikely to change their minds on the issue. Indeed, a White House that was willing to take over much of the US auto industry to save the UAW is probably not keen on tax, either.
Moreover, the other Senate bill (Kennedy-Dodd, HELP) does not specify what spending will be cut or what taxes will be raised to pay for the increased spending. That was the job of the Finance Committee. And the House bills rely on larger cuts to Medicare and Medicare Advantage, which are (as noted above) imaginary, but will nevertheless tend to scare the Hell out of Seniors who already oppose ObamaCare and are more likely to vote in midterm elections. The GOP has already signaled that it plans to hit the Dems hard on these points if and when a bill reaches the Senate floor.
So the 201 billion dollar question is when the Democrats are going to decide whether to soak seniors or their union base to pay for their government takeover of the US healthcare system.